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Why and How to Invest in the US Stock Markets Directly?

by Anchit Shethia   ·  September 15, 2020   ·  

Why and How to Invest in the US Stock Markets Directly?

by Anchit Shethia   ·  September 15, 2020   ·  

The US Stock Markets touched multiple all-time highs immediately after doing a steep dive with regards to the ongoing COVID-19. However, the US Tech companies grew stronger than ever before despite the pandemic. Leaving aside a handful of Indians, almost no Indian retail investor benefitted from this spurge in growth.

Indian investors never take a bite from the success of US companies in India or elsewhere. The problem is not in the investors. The problem lies with the fundamental route to invest in US Stocks and there is no easy way around or a direct app to invest in them.

Why invest in the US?

We all have felt the guilt of missing out on amazing US Stocks rally over the past month or two. The growth in the US companies has been unprecedented with Amazon running over 71%, Apple with over 51%, Facebook over 30%, Alphabet (Google) over 10%, Microsoft over 35%, and so on.

The NASDAQ, which is the NSE of the US Markets, grew over 21% YTD. This growth is phenomenal and the kind of returns Indians crave for. Moreover, investing in the US Market consciously gives a hedge to your Indian portfolio since you have invested in fundamentally strong companies in a developed economy and that too in the USD currency.

Investing in a strong economy will also give you peace of mind when Indian markets are volatile.

How to invest in the US Stock Market?

This is a question that we at InvestorJi have been getting time and again as to how to invest in NASDAQ, NYSE, Dow Jones, and other US exchanges. However, due to insufficient or inefficient services that were available up until now, we did not recommend any such services.

There were obviously some ways like having a relative in the US through which you send them the money in USD and they buy it for you. Another way was to invest in certain ETFs.

One such ETF that I have been testing over a couple of years was N100, also known as Nasdaq 100 ETF by Motilal Oswal Mutual Fund. I entered the ETF at the price of INR 320. Today, it ranges around INR 750 to 850.

While N100 ETF is a great way to invest in the US Market, we cannot control what stocks we invest in since it automatically invests in the top 100 Nasdaq companies. Is there a way to invest in Individual companies like Apple, Google, NVIDIA, Facebook, Microsoft, Tesla, etc.?

Many brokerages such as Motilal Oswal have started offering such facilities in partnership with US brokerages. You can easily open a Demat account with them and start trading.

The MO Investor App

Motilal Oswal has partnered with New York based Stockal to offer Indian investors a platform to invest directly into the US companies. Not just US companies, you can invest in anything that is available in the US Financial Markets such as their ETFs and Bonds.

The major feature of the MO App is you can buy the US Companies in fractions as well. For e.g., Amazon is priced at over US$2000. You certainly cannot spend INR 1.5 Lakhs to buy 1 share of Amazon. So, you can easily buy a fraction of the share for say, INR 5000.

The app does not have any minimum spending so you can invest as low as INR 500. The app converts INR for you into Dollar and the process is extremely easy to follow. You can also start SIP in the stocks.

All of these are apart from the online share trading from which you trade in the Indian stock market. What better convenience then investing in the Indian and US Stock markets from a single broking house? The Indian broking platform has all sorts of features that you can expect from a high-quality broking house.

Over to you

Investing in the US Markets has become more important than ever not just to grow our capital but also to hedge against the uncertainties of a developing market like India.

Motilal Oswal’s MO app is giving the opportunity to invest in foreign markets apart from our own Indian trading platform. Do note that the RBI has allowed a Liberalized Remittance Scheme which allows every Indian to remit up to US$250,000, so remember your upper limits when investing.

As with any equity investments, US Stock market is no alien to corrections, crashes and recessions. So do a strong research even when investing in the US markets!

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